Government shutdown begins as Congress divides on spending

The U.S. government began its first partial shutdown in 17 years, idling as many as 800,000 federal employees, closing national parks and halting some services after Congress failed to break a partisan deadlock by a midnight deadline.

Congressional leaders have scheduled no further negotiations on spending legislation, raising concerns among some lawmakers that the shutdown could bleed into the more consequential fight over how to raise the U.S. debt limit to avoid a first-ever default after Oct. 17.

Many federal employees reporting to work today will be given a few hours to conduct shutdown activities, such as securing files and posting closed signs and phone messages, before being sent home until Congress passes a spending measure for the new fiscal year, which began today. One government operation that will continue is the start of enrollment in the health-insurance exchanges mandated under President Barack Obama’s Affordable Care Act, the plan opposed by many Republicans.

Markets took the government shutdown in stride. Global stocks rose after the biggest decline in a month and Treasuries fell on speculation any economic effect from it will be limited. The dollar weakened. The Bloomberg U.S. Dollar Index dropped 0.2%, crude fluctuated and corporate bond risk fell for the first time in five days.

Public Opposition

Still, the shutdown will be broadly unpopular with the public, according to a national poll released today by Quinnipiac University. By 72% to 22%, Americans oppose Congress “shutting down major activities of the federal government” as a way to stop the health-care law, known as Obamacare, from going into effect, the national survey found.

The poll, conducted Sept. 23-29, showed voters disapprove of the job being done by congressional Republicans 74%-17% -- their lowest score ever -- while disapproving of Democrats’ job 60%-32%. Obama got a negative 45%-49% overall job approval rating, versus his 46%-48% score Aug. 2, according to the survey, which has a margin of error of plus or minus 2.5 percentage points.

“Americans are certainly not in love with Obamacare, but they reject decisively the claim by congressional Republicans that it is so bad that it’s worth closing down the government to stop it,” said Peter Brown, assistant director of the Hamden, Connecticut-based polling institute.

Economic Cost

A partial federal government shutdown would cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc. That’s a fraction of the country’s $15.7 trillion economy, and the effects probably will grow over time as consumers and businesses defer purchases and expansion plans.

The next step on a spending measure was uncertain today. Representative Tom Cole, an Oklahoma Republican, said on MSNBC’s “Morning Joe” that House Republicans want to go to a conference with the Democratic-led Senate to negotiate.

Republican Representative Darrell Issa of California said Congress should agree on an interim spending deal to give 10 days “even 30 days if that was necessary” to settle differences over curtailing parts of Obamacare.

Senator Richard Durbin of Illinois, the chamber’s second- ranking Democrat, said he was willing to look at one aspect of the health-care law.